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Filed Pursuant to Rule 424B3
Registration No. 333-77603
PROSPECTUS
MAY 18, 1999
286,481 SHARES
EL PASO ENERGY CORPORATION
COMMON STOCK
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EL PASO ENERGY CORPORATION:
- - El Paso Energy is a diversified energy holding company. It is engaged through
its subsidiaries in the interstate and intrastate transportation, gathering,
and processing of natural gas, marketing of natural gas, power, and other
energy-related commodities, power generation, and the development and
operation of energy infrastructure facilities worldwide. El Paso Energy owns
the only integrated coast-to-coast natural gas pipeline system in the United
States.
- - El Paso Energy Corporation
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(713) 420-2131
TRADING SYMBOL & MARKET:
- - EPG/New York Stock Exchange
THE OFFERING:
- - This prospectus relates to 286,481 shares of our common stock, par value $3.00
per share.
- - All of the shares are being offered by the selling stockholders named in this
prospectus. We will not receive any proceeds from this offering but will incur
some of the expenses.
- - On May 17, 1999, the closing price of our common stock on the NYSE was
$36.0625 per share, and there were 121,493,576 shares outstanding on that
date.
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" ON PAGE 2.
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NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR DETERMINED THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
<TABLE>
<S> <C>
Risk Factors........................... 2
Cautionary Statement Regarding
Forward-Looking Statements........... 4
Business of El Paso Energy............. 6
Use of Proceeds........................ 7
Selling Stockholders................... 8
Where You Can Find
More Information..................... 8
Plan of Distribution................... 10
Legal Matters.......................... 11
Experts................................ 11
</TABLE>
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RISK FACTORS
Before you invest in our common stock, you should read the risks,
uncertainties and factors which may adversely affect El Paso Energy that are
discussed under the caption "Risk Factors -- Cautionary Statement For Purposes
of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995" in the El Paso Energy 1998 Annual Report on Form 10-K and which are
incorporated by reference in this prospectus, as well as the following
additional risk factors which contemplate the consummation of the proposed
merger of El Paso Energy and Sonat Inc. discussed in this prospectus in the
section "Business of El Paso Energy -- Merger with Sonat Inc."
RISKS RELATED TO THE PROPOSED MERGER WITH SONAT AND SONAT'S OPERATIONS
THE STRUCTURE OF THE MERGER WILL NOT BE KNOWN UNTIL AFTER THE EL PASO ENERGY
STOCKHOLDERS' SPECIAL MEETING.
Because the structure of the merger depends on the vote of our
stockholders, we will not know until after the special meeting the structure of
the merger and type of consideration we will be required to pay for shares of
Sonat common stock.
PAYMENTS OF DIVIDENDS ON SENIOR VOTING PREFERRED STOCK ISSUED UNDER THE
ALTERNATIVE MERGER STRUCTURE WOULD REDUCE THE FUNDS AVAILABLE TO THE COMBINED
COMPANY TO FUND GROWTH AND OPERATIONS.
We currently estimate that, if we complete the alternative merger, dividend
payments in respect of the senior voting preferred stock would be between
approximately $256 million and $356 million annually based on the number of
shares of El Paso Energy common stock, shares of Sonat common stock and Sonat
options outstanding as of March 5, 1999, and an assumed dividend rate of 8.75%.
The actual annual dividend rate will be set at a rate that our financial
advisors believe would cause the depositary shares, when fully distributed after
completion of the alternative merger, to trade initially at approximately $100
per share. Because we would be using cash to pay these dividends, the amount of
cash we would have available for expansion opportunities and ongoing operations
would be significantly reduced.
EL PASO ENERGY AND SONAT COULD BE REQUIRED TO EFFECT SIGNIFICANT DIVESTITURES
OR COMPLY WITH OTHER REGULATORY REQUIREMENTS.
We cannot complete the merger until the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (the HSR Act)
has expired or terminated. We are also required to obtain the approval of the
Federal Energy Regulatory Commission (the FERC) in order to complete the merger.
El Paso Energy and Sonat are both obligated, under the terms of the merger
agreement, to use their "reasonable best efforts" to take all action to ensure
that the waiting period under the HSR Act and all extensions of that period
expire or are terminated and other required approvals are obtained. Neither of
us is obligated, however, to take actions that would reasonably be likely to
have a material adverse effect on the business, financial condition, or results
of operations of the combined company after the merger, and El Paso Energy is
not obligated to take actions that would reasonably be likely to have a material
adverse effect on its subsidiary, Tennessee Gas Pipeline Company. Governmental
authorities could require the companies to effect significant divestitures as a
condition to approving the transaction or impose other conditions that would
affect subsequent operations of the combined company.
We cannot assure you that these and any other required regulatory approvals
will be obtained or, if they are obtained, as to the terms, conditions and
timing of these approvals. These requirements for
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regulatory approvals could delay completion of the merger for a significant
period of time after the Sonat and El Paso Energy stockholders have approved the
merger at the special meetings.
IF THE MERGER IS COMPLETED UNDER THE ALTERNATIVE MERGER STRUCTURE, THE MERGER
WILL BE DILUTIVE TO OUR EARNINGS PER SHARE FOR AT LEAST THREE YEARS.
THE RATES THAT SONAT'S PIPELINE SUBSIDIARY IS ABLE TO CHARGE ITS CUSTOMERS MAY
BE REDUCED BY GOVERNMENTAL AUTHORITIES.
The pipeline transportation business conducted by Sonat's subsidiary,
Southern Natural Gas Company, is regulated by the FERC and various state and
local regulatory agencies. In particular, the FERC generally limits the rates
the Sonat subsidiary is permitted to charge its customers for interstate
transportation and, in some cases, sales of natural gas. If the rates the Sonat
subsidiary is permitted to charge its customers for transportation are lowered,
the profitability of Sonat's pipeline business may be reduced. Under the terms
of a settlement approved by the FERC, Sonat's subsidiary is required to file a
new rate case no later than September 1, 1999, to become effective by March 1,
2000. We cannot predict the outcome of that rate case.
MANY OF THE CONTRACTS FOR NATURAL GAS TRANSMISSION BY SONAT'S SUBSIDIARY WILL
EXPIRE WITHIN THE NEXT FEW YEARS.
Substantially all of the revenues of Sonat's subsidiary, Southern Natural
Gas Company, are generated under long-term natural gas transportation contracts.
Contracts representing approximately 58% of Southern Natural Gas Company's firm
transportation capacity will expire by their terms by September 1, 2003.
Contracts with one gas distribution customer account for 46% of these expiring
contracts. Although we expect the Sonat subsidiary to negotiate to extend these
contracts, there can be no assurance that it will be able to extend or replace
these contracts or that the terms of any renegotiated contracts will be as
favorable as the existing contracts. If the Sonat subsidiary is unable to renew
these contracts or if it renews them on less favorable terms, it may suffer a
material reduction in revenue and earnings.
THE SUCCESS OF SONAT'S EXPLORATION AND PRODUCTION BUSINESS IS DEPENDENT ON
FACTORS WHICH CANNOT BE PREDICTED WITH CERTAINTY.
The performance of Sonat's exploration and production business is dependent
upon a number of factors that cannot be predicted with certainty. These factors
include:
- the effect of oil and natural gas prices on revenues;
- the results of future drilling activity;
- Sonat's ability to identify and precisely locate prospective geologic
structures and to drill and successfully complete wells in those
structures; and
- Sonat's ability to expand leased land positions in desirable areas, which
often are subject to intensely competitive leasing conditions.
KEY PERSONNEL COULD TERMINATE THEIR EMPLOYMENT WITH THE COMBINED COMPANY.
El Paso Energy's senior management has limited experience in the oil and
gas exploration and production business. Although we expect Sonat personnel who
currently operate Sonat's exploration and production business to remain with the
combined company, we cannot assure you that any of these personnel will remain
with the combined company after we complete the merger.
All of the executive officers and other key employees of Sonat are parties
to severance agreements and have the right to receive substantial payments if
their employment is terminated by
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the combined company, if they terminate their employment for good reason after
the merger or, in the case of its executive officers and two other key
executives, if they terminate employment for any reason during the 30-day period
immediately following the first anniversary of the merger. Executive officers
and certain other key employees of El Paso Energy have similar rights under
applicable plans, unless the merger is completed under the alternative merger
structure. In addition, several Sonat executive officers are eligible to
participate in a voluntary reduction-in-force window program if they (1) give
notice of intent to terminate their employment within a 45-day period currently
expected to end on December 31, 1999, and (2) terminate their employment during
a 6-month period currently expected to end on June 30, 2000. These individuals
will be entitled to severance payments under their severance agreements if they
elect to take early retirement. Accordingly, El Paso Energy expects that a
substantial number of Sonat executive officers and other employees will likely
terminate their employment within the year following completion of the merger.
We cannot assure you that, if executive officers and other key employees of
either El Paso Energy or Sonat leave the combined company, we will be able to
find adequate replacements.
WE CANNOT ASSURE YOU THAT EL PASO ENERGY AND SONAT WILL BE SUCCESSFULLY
COMBINED INTO A SINGLE ENTITY.
If we cannot successfully combine our operations we may experience a
material adverse effect on our business, financial condition or results of
operations. The merger involves the combining of two companies that have
previously operated separately. The combining of companies such as Sonat and El
Paso Energy involves a number of risks, including:
- the diversion of management's attention to the combining of operations;
- difficulties in the combining of operations and systems, including plans
to update and test systems for "Year 2000" compliance;
- difficulties in the assimilation and retention of employees;
- challenges in keeping customers; and
- potential adverse short-term effects on operating results.
Among the factors considered by the boards of directors of each company in
approving the merger agreement were the opportunities for economies of scale and
scope and operating efficiencies that could result from the merger. Although we
expect the combined company to achieve significant annual savings in operating
costs as a result of the merger, we may not be able to maintain the levels of
operating efficiency that we each previously achieved or might achieve if we
remain separate. Because of difficulties in combining operations, we may not be
able to achieve the cost savings and other size-related benefits that we hope to
achieve after the merger.
In addition, because (1) Sonat's marketing operations are held through a
joint venture in which Sonat has a 65% interest and (2) its Florida pipeline is
held through a joint venture that is operated by a subsidiary of Enron Corp. and
in which Sonat has a 50% interest, the combined company may not be able to
effectively integrate these operations with similar operations of El Paso Energy
to achieve cost savings in these operations.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
We have made statements in this prospectus and in documents that are
incorporated by reference into this prospectus that constitute forward-looking
statements, as that term is defined in the Private Securities Litigation Reform
Act of 1995. These statements are subject to risks and uncertainties.
Forward-looking statements include information concerning possible or assumed
future
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results of operations of El Paso Energy, Sonat or the combined company. These
statements may relate to, but are not limited to, information or assumptions
about earnings per share, capital and other expenditures, dividends, financing
plans, capital structure, cash flow, pending legal proceedings and claims,
including environmental matters, future economic performance, operating income,
cost savings, management's plans, goals and objectives for future operations and
growth and markets for the common stock of El Paso Energy. These forward-looking
statements generally are accompanied by words such as "intend," "anticipate,"
"believe," "estimate," "expect," "should" or similar expressions. You should
understand that these forward-looking statements are necessarily estimates
reflecting the best judgment of senior management of El Paso Energy, not
guarantees of future performance. They are subject to a number of assumptions,
risks and uncertainties that could cause actual results to differ materially
from those expressed or implied in the forward-looking statements. Important
factors that could cause actual results to differ materially from estimates or
projections contained in forward-looking statements include, among other, the
following:
- the risk that revenues may be affected by fluctuating energy prices;
- the risk that rates charged to customers may be reduced by governmental
authorities;
- the highly competitive nature of the natural gas transportation,
gathering, processing, storage and energy marketing industries;
- the risk of favorable customer contracts expiring or being renewed on
less attractive terms;
- the uncertainty concerning the future success of exploration and
production activities;
- the costs of environmental liabilities, regulations and litigation;
- the impact of operational hazards;
- the risk that required regulatory approvals for proposed pipeline,
storage and power generation projects may be delayed or may only be
granted on terms that are unacceptable or significantly less favorable
than anticipated;
- the risks associated with future weather conditions;
- the risk that the merger with Sonat may not occur;
- the risk that Sonat's businesses may not be successfully integrated with
El Paso Energy's businesses;
- the risk that we may not fully realize the benefits expected to result
from the merger;
- the impact of the loss of key employees;
- the risk that other firms will further expand into markets in which El
Paso Energy or Sonat operate; and
- other risks, uncertainties and factors, including the effect of the year
2000 date change, discussed more completely in El Paso Energy's other
filings with the Securities and Exchange Commission, including the El
Paso Energy 1998 Annual Report on Form 10-K.
Certain of these factors are more fully described in "Risk Factors." Other
factors that could cause actual results to differ materially from estimates and
projections contained in forward-looking statements are described in the
documents that we incorporated by reference into this document. You should not
place undue reliance on forward-looking statements, which speak only as of the
date of this prospectus, or, in the case of documents incorporated by reference,
the date of those documents.
All subsequent written and oral forward-looking statements attributable to
El Paso Energy or any person acting on its behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to in this
section. El Paso Energy does not undertake any obligation to release publicly
any revisions to these forward-looking statements to reflect events or
circumstances after the date of this prospectus or to reflect the occurrence of
unanticipated events.
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BUSINESS OF EL PASO ENERGY
Our principal operations include:
- the interstate and intrastate transportation, gathering, and processing
of natural gas;
- the marketing of natural gas, power, and other energy-related
commodities;
- power generation; and
- the development and operation of energy infrastructure facilities
worldwide.
We own or have interests in over 28,000 miles of interstate and intrastate
pipeline connecting the nation's principal natural gas supply regions to four of
the largest consuming regions in the United States, namely the Gulf Coast,
California, the Northeast, and the Midwest. Our interstate natural gas
transmission operations include one of the nation's largest and only
coast-to-coast mainline natural gas transmission systems which is comprised of
five interstate pipeline systems: the El Paso Natural Gas pipeline, the
Tennessee Gas pipeline, the Midwestern Gas Transmission pipeline, the East
Tennessee Natural Gas pipeline, and the Mojave pipeline.
In addition to our interstate transmission services, we provide related
services, including natural gas gathering, products extraction, dehydration,
purification, compression, and intrastate transmission. These services include
gathering of natural gas from more than 10,000 natural gas wells with
approximately 11,000 miles of gathering lines, and 23 natural gas processing and
treating facilities located in some of the most prolific and active production
areas of the United States, including the San Juan and Permian Basins and in
east Texas, south Texas, Louisiana, and the Gulf of Mexico. We conduct
intrastate transmission operations through our interests in four Texas
intrastate systems, which include the Oasis pipeline running from west Texas to
Katy, Texas, the Channel pipeline extending from south Texas to the Houston Ship
Channel, and the Shoreline and Tomcat gathering systems which gather gas from
offshore Texas. We also provide intrastate transportation in north Louisiana
through our Gulf States pipeline that runs from the Texas border to Ruston,
Louisiana. Our marketing activities include the marketing and trading of natural
gas, power, and other energy-related commodities, as well as providing
integrated price risk management services associated with these commodities. We
also participate in the development and ownership of domestic power generation
facilities and other power-related assets and joint ventures.
Our international activities focus on the development and operation of
international energy infrastructure projects and include ownership interests in
three major operating natural gas transmission systems in Australia and natural
gas transmission systems and power generation facilities currently in operation
or under construction in Argentina, Bolivia, Brazil, Chile, the Czech Republic,
Hungary, Indonesia, Mexico, Pakistan, Peru, the United Kingdom, Bangladesh, the
Philippines, and China.
Our principal executive offices are in the El Paso Energy Building, located
at 1001 Louisiana Street, Houston, Texas 77002, and our telephone number at that
address is (713) 420-2131.
MERGER WITH SONAT INC.
We entered into the second amended and restated agreement and plan of
merger with Sonat Inc. dated as of March 13, 1999, (the "Merger Agreement")
pursuant to which Sonat will merge into El Paso Energy, and we will issue to
Sonat stockholders one share of El Paso Energy common stock for each share of
Sonat common stock owned by them, and our certificate of incorporation will be
amended to authorize us to issue up to 750 million shares of common stock and 50
million shares of preferred stock. We are planning to hold a special meeting of
our stockholders to consider and vote on a proposal to adopt the Merger
Agreement. If our stockholders do not approve the Merger Agreement, but Sonat
stockholders do approve the Merger Agreement, Sonat will instead merge with a
subsidiary of El Paso Energy under an alternative merger structure, and we will
issue a combination
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of (1) a fraction of a share of El Paso Energy common stock and (2) a fraction
of a depositary share representing a fractional interest in a new series of
senior voting preferred stock of El Paso Energy for each share of Sonat common
stock. We will complete the merger with Sonat only if a number of conditions are
satisfied or waived, including:
- Sonat stockholders adopt the Merger Agreement;
- no law or court order prohibits the transaction;
- all waiting periods under federal antitrust laws applicable to the merger
expire or terminate;
- all other regulatory approvals are received without conditions that would
have a materially adverse effect on the financial condition, results of
operations or cash flow of our combined businesses; and
- attorneys for El Paso Energy and Sonat issue opinions that the merger is
expected to be tax free.
However, we cannot assure you that we will complete the merger even if such
conditions are satisfied.
If the El Paso Energy and Sonat stockholders both approve the Merger
Agreement, El Paso Energy and Sonat will complete the merger on an all common
stock basis, and we expect to account for the merger using the pooling of
interests method of accounting in accordance with United States generally
accepted accounting principles. If our stockholders do not approve the Merger
Agreement, El Paso Energy and Sonat will complete the merger under the
alternative merger structure, and we will account for the merger using the
purchase method of accounting in accordance with United States generally
accepted accounting principles.
Sonat Inc. is a diversified energy holding company. It is engaged through
its subsidiaries and joint ventures in domestic oil and natural gas exploration
and production, in the transmission and storage of natural gas, and in natural
gas and power marketing. Sonat has interests in oil and gas producing properties
in Louisiana, Texas, Oklahoma, Arkansas, Alabama, New Mexico and the Gulf of
Mexico. Sonat owns approximately 1.6 trillion cubic feet equivalent of proved
reserves.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares of
common stock offered by this prospectus.
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SELLING STOCKHOLDERS
This prospectus relates to the sale by certain selling stockholders from
time to time of up to 286,481 shares of El Paso Energy common stock. The selling
stockholders acquired the shares of common stock in connection with our
acquisition of EnCap Investments L.C. The shares of common stock offered by the
selling stockholders are included in the registration statement of which this
prospectus is a part pursuant to an undertaking made in connection with the
EnCap acquisition. The following table sets forth as of May 17, 1999 certain
information with respect to the selling stockholders.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED BEFORE NUMBER OF
OFFERING NUMBER OF SHARES BENEFICIALLY
-------------------- SHARES OWNED AFTER
SELLING STOCKHOLDER NUMBER PERCENT BEING OFFERED OFFERING(1)
------------------- -------- -------- ------------- -------------------
<S> <C> <C> <C> <C>
Eugene C. Fiedorek................... 21,521 * 21,521 0
David B. Miller...................... 39,904 * 39,904 0
Gary R. Peterson..................... 39,904 * 39,904 0
D. Martin Phillips................... 39,904 * 39,904 0
M. Sean Smith........................ 9,057 * 9,057 0
Robert L. Zorich..................... 39,904 * 39,904 0
Banc One Capital Partners VIII,
Ltd................................ 96,287 * 96,287 0
Total................................ 286,481 * 286,481 0
</TABLE>
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* Less than 1%
(1) Assumes that each selling stockholder will sell all of the shares set forth
above under "Number of Shares Being Offered." The selling stockholders may
offer all, some or none of their shares.
We will pay all costs and expenses incurred in connection with the
registration under the Securities Act of 1933 of the shares offered hereby,
including, but not limited to, all registration and filing fees, the NYSE
listing fee, printing expenses and fees and disbursements of counsel and
accountants for El Paso Energy. The selling stockholders will pay all brokerage
fees and commissions, if any, incurred in connection with the sale of the
shares.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement under the Securities
Act of 1933 that registers the shares to be sold by the selling stockholders.
The registration statement, including the attached exhibits, contains additional
relevant information about us. The rules and regulations of the SEC allow us to
omit some information included in the registration statement from this
prospectus.
In addition, we file reports, proxy statements and other information with
the SEC under the Securities Exchange Act of 1934. You may read and copy this
information at the following locations of the SEC:
<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
Room 1024 Suite 100 Citicorp Center
450 Fifth Street, N.W. 7 World Trade Center Suite 1400
Washington, D.C. 20549 New York, New York 10048 500 West Madison Street
Chicago, Illinois 60661-2511
</TABLE>
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You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. The SEC also maintains an
Internet World Wide Web site that contains reports, proxy statements and other
information about issuers, including El Paso Energy and Sonat, who file
electronically with the SEC. The address of that site is http://www.sec.gov. You
can also inspect reports, proxy statements and other information about each of
us at the offices of The New York Stock Exchange, Inc., located at 20 Broad
Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" information into this
document. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this document, except for
any information that is superseded by information that is included directly in
this document.
We incorporate by reference the documents listed below that we have
previously filed with the SEC. They contain important information about our
company and its financial condition. Some of these filings have been amended by
later filings, which are also listed.
<TABLE>
<CAPTION>
OUR SEC FILINGS (FILE NO. 1-14365) DESCRIPTION OR PERIOD/AS OF DATE
---------------------------------- --------------------------------
<S> <C>
Annual Report on Form 10-K Year ended December 31, 1998
Current Report on Form 8-K, dated March Discloses the entering into of the merger
15, 1999 agreement between El Paso Energy and Sonat
and related matters
Current Report on Form 8-K, dated April Discloses preliminary unaudited pro forma
23, 1999 financial information of El Paso Energy
and Sonat giving effect to their proposed
merger
Current Report on Form 8-K, dated April Discloses first quarter operating results
23, 1999 of El Paso Energy
Current Report on Form 8-K/A, dated April Amends our Current Report on Form 8-K
30, 1999 dated April 23, 1999 disclosing pro forma
financial information
Registration Statement on Form 8-A, dated Contains a description of the El Paso
August 3, 1998 Energy common stock
Registration Statement on Form 8-A/A dated Contains a description of the El Paso
January 29, 1999 Energy preferred stock purchase rights
Definitive Proxy Statement on Schedule 14A Definitive proxy statement relating to the
1999 annual meeting of El Paso Energy's
stockholders (filed on March 11, 1999)
</TABLE>
We incorporate by reference additional documents that either company may
file with the SEC until all of the shares offered by this prospectus have been
sold. These documents include periodic reports, including Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as
proxy statements.
You can obtain any of the documents incorporated by reference in this
document through us or from the SEC through the SEC's web site at the address
provided above. Documents incorporated by reference are available from us
without charge, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference as an exhibit in this document. You can
obtain
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documents incorporated by reference in this document by requesting them in
writing or by telephone from us at the following address:
El Paso Energy Corporation
Office of Investor Relations
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
Telephone No.: (713) 420-2131
WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION THAT DIFFERS FROM, OR ADDS TO, THE INFORMATION IN THIS DOCUMENT
OR IN OUR DOCUMENTS THAT ARE PUBLICLY FILED WITH THE SEC. THEREFORE, IF ANYONE
DOES GIVE YOU DIFFERENT OR ADDITIONAL INFORMATION, YOU SHOULD NOT RELY ON IT.
IF YOU ARE IN A JURISDICTION WHERE IT IS UNLAWFUL TO OFFER TO EXCHANGE OR
SELL, OR TO ASK FOR OFFERS TO EXCHANGE OR BUY, THE SHARES OF COMMON STOCK
OFFERED BY THIS DOCUMENT, OR IF YOU ARE A PERSON TO WHOM IT IS UNLAWFUL TO
DIRECT THESE ACTIVITIES, THEN THE OFFER PRESENTED BY THIS DOCUMENT DOES NOT
EXTEND TO YOU.
THE INFORMATION CONTAINED IN THIS DOCUMENT SPEAKS ONLY AS OF ITS DATE
UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES.
PLAN OF DISTRIBUTION
The shares of common stock offered by the selling stockholders may be
offered and sold by means of this prospectus from time to time as market
conditions permit in one or more transactions on the NYSE, in the
over-the-counter market, in negotiated transactions or otherwise, or through a
combination of these methods, at fixed prices, which may be changed, at prices
and terms then prevailing or at prices related to the then-current market price,
or at negotiated prices. These shares may be sold by one or more of the
following methods, without limitation:
- a block trade in which a broker or dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by the broker or
dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
- face-to-face transactions between sellers and purchasers without brokers
or dealers.
In making sales, brokers or dealers engaged by the selling stockholders may
arrange for other brokers or dealers to participate. These brokers or dealers
may receive commissions or discounts from selling stockholders in amounts to be
negotiated.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In effecting sales,
brokers or dealers engaged by the selling stockholders may arrange for other
brokers or dealers to participate in the resales.
The selling stockholders and any persons who participate in the
distribution of the shares offered by this prospectus may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, and any
commissions received by them and profit on any resale of the shares as principal
may be considered underwriting discounts and commissions under the Securities
Act of 1933.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they
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have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and is
complied with.
Under applicable rules and regulations under the Securities Exchange Act of
1934, any person engaged in the distribution of the shares may not
simultaneously engage in market making activities with respect to our common
stock for a specified period prior to the commencement of such distribution and
until its completion. In addition, each selling stockholder will be subject to
applicable provisions of the Securities Exchange Act of 1934 and the associated
rules and regulations under the Securities Exchange Act of 1934, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling stockholders. We will make copies of
this prospectus available to the selling stockholders and have informed them of
the need for delivery of copies of this prospectus to purchasers at or prior to
the time of any sale of the shares.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon by Andrews & Kurth L.L.P., Houston, Texas.
EXPERTS
The consolidated financial statements and financial statement schedule of
El Paso Energy as of December 31, 1998 and 1997, and for the years ended
December 31, 1998, 1997 and 1996, incorporated by reference in this prospectus,
have been incorporated by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
such firm as experts in accounting and auditing.
The consolidated financial statements of Sonat Inc. as of December 31, 1998
and 1997, and for the years ended December 31, 1998, 1997 and 1996, included in
El Paso Energy's Current Report on Form 8-K/A dated April 30, 1999, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference, which, as to the
year ended December 31, 1996, is based on the report of KPMG LLP, independent
auditors. The report of KPMG LLP refers to a change by Zilkha Energy Company in
accounting for oil and gas properties from the full cost method to the
successful efforts method. Such restated consolidated financial statements are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.
11
<PAGE> 13
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MAY 18, 1999
286,481 SHARES
EL PASO ENERGY CORPORATION
COMMON STOCK
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PROSPECTUS
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WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE YOU
WRITTEN INFORMATION OTHER THAN THIS PROSPECTUS OR TO MAKE REPRESENTATIONS AS TO
MATTERS NOT STATED IN THIS PROSPECTUS. YOU MUST NOT RELY ON UNAUTHORIZED
INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES OR OUR
SOLICITATION OF YOUR OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE
THAT WOULD NOT BE PERMITTED OR LEGAL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALES MADE HEREUNDER AFTER THE DATE OF THIS PROSPECTUS SHALL CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THE AFFAIRS OF EL PASO
ENERGY HAVE NOT CHANGED SINCE THE DATE HEREOF.
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